Final Thoughts

So, on the other side of this deal, what do we have?

ArcelorMittal Calvert

As part of an equity purchase agreement from October 2024, the ArcelorMittal-Nippon joint venture AM/NS Calvert is now ArcelorMittal Calvert.

Nippon had said it would relinquish its stake in the JV with ArcelorMittal in Calvert, Ala., if the deal were to go through. In a statement on Wednesday, ArcelorMittal confirmed it completed the purchase of Nippon’s 50% equity stake.

The new facility will be renamed ArcelorMittal Calvert. More details are available here.

Recall that in February, ArcelorMittal said it planned to invest $1.2 billion to build an advanced, non-grain-oriented electrical steel (NOES) manufacturing facility near the existing JV in Calvert.

It will be able to produce up to 150,000 metric tons of NOES annually, and will support the “automotive and mobility, renewable electricity production, and other industrial and commercial markets.

An interesting tidbit in Wednesday’s news release:  

“A new seven-year domestic slab supply agreement with Nippon Steel has commenced, averaging 750,000 metric tons per year, ensuring a significant portion of the slab requirements are melted and poured in the United States,” ArcelorMittal said.

Fate of litigation

We have previously reported on the litigation that Nippon/USS filed against the US government, Cliffs’ Chairman, President, and CEO Lourenco Goncalves, and United Steelworkers (USW) International President Dave McCall.

The Denver Gazette reported an update on the USS/Nippon case against the US government would be provided on June 20. Note the litigation had been paused.

It seems there have been no updates as of yet on the other cases. A request for comment on this matter from Nippon was not returned by time of publication.

“Golden share” and automotive

In a research note following the completion of the deal, Josh Spoores, head of Steel Americas Analysis for SMU parent company CRU, raised questions on automotive and the “Golden Share,” among other things.

To me, these two issues really stick out in the way they could set precedents, not just for steel, but for all industry in the US.

With the “Golden Share,” the government pulls up a seat to the corporate table. Now, to say the US has been some kind of laissez faire petri dish of industry wouldn’t hold water. Just look at the US automakers following the 2008 financial crisis. For that matter, look at the banks following the 2008 financial crisis. Even in the capitalist US of A, government is involved in business affairs at many levels.

However, we’ll have to see how the “Golden Share” could be different, and if the government takes a more activist role with no exit in sight. And how could that share change under succeeding administrations?

Finally, will we see this arrangement pop up in other sectors that are deemed vital to national security?

Regarding automotive, Spoores wondered if Nippon’s buy of USS could translate into Japanese automakers in the US switching over to USS to source their steel. Nippon certainly has both the capital and the technological know-how to increase production capacity. They’ve already agreed to invest billions in USS facilities.

(Earlier this year, South Korea’s Hyundai and POSCO inked a deal to build an EAF steel mill in Louisiana. They have indicated one of the uses will be to supply Korean automakers like Hyundai and Kia with manufacturing plants in the US.)

New greenfield mill?

In the USS/Nippon deal valued at over $14 billion, there are obviously MANY open-ended questions. Another one that stands out is Nippon’s promise to build a greenfield mill in the US. As we reported, that was confirmed by USS CEO David Burritt on Wednesday.

Will it be an EAF mill similar to Big River Steel in Arkansas? Could Nippon buck recent American history and build a state-of-the-art blast furnace? And, perhaps equally intriguing, where will it be?

To find out the answers to these and other questions, we suggest you stay tuned. These are definitely interesting times.

AMU

It’s not only the happenings of the steel world we’ll keep you updated on. The Aluminum Metal Update (AMU) website is now live. You can check it out here.

Their team is already on the job, keeping up with the latest developments on tariffs and posting the latest market updates. We can’t wait for you to take a look at all your aluminum intel, or even if you’re just curious about what’s happening in that nonferrous neck of the woods.